New Generation Trade blog

A call for trade that protects the new generations coming to this beautiful planet.


The Deadly Tango of Trade and Climate Change

ISDS suppresses buy-local and supports climate change.

Sending more stuff around the globe! The aim of global free trade is to send evermore objects and services around the globe. Free trade suppresses local exchange by its philosophy and now, with the rise of investor state dispute settlement (ISDS), also by its law. Can we afford such unbalanced economics in a world beginning to witness the horrors of climate change?

Trade-ables are community assets! New generation trade deals are far more radical than most realize because of their content and how they are enforced. The majority of tariffs for goods were dropped by the nineties, and so trade industry specialists sought new markets. Trade-ables now are public assets like energy and water. The North American Free Trade Agreement (NAFTA), a first in this new trade frame, is one part energy treaty. For example, NAFTA article 605 requires Canada to export energy to the US.

Transnational Corporations hold serious power in trade! NAFTA popularized a way to hold nations to account for a corporation’s profits — Investor State Dispute Settlement (ISDS). ISDS gives trade legal options for corporations to sue countries or communities to make more money in their sector, even from practices that may contribute to climate change, while sometimes making grassroots incentives illegal. ISDS has no capacity to reprimand corporate practices because it does not jury a nation’s complaints, only a business’!

Cases of Energy Corporations Suing Countries! The first NAFTA-case was won in 1997 by a company in the gasoline industry. Ethyl Corporation won the right to continue using gasoline that contained additives that Canada banned because studies showed them as potential carcinogens. Using the National Treatment clause in ISDS, Ethyl won 13 million from Canadians for their right to be treated like any other national interest. The fancy trade law term in ISDS is National Treatment. Canada was stuck with the additives.

What are NAFTA’s risks now as we move into the potential CETA– TTIP era? The world has moved on from NAFTA to CETA–TTIP, TTP! Does NAFTA still have impacts twenty-plus years after implementation? You bet your bottom dollar, and your communities. Quebec presently has a moratorium on fracking in the St. Lawrence region to study potential risks to water supply. Lone Pine Corporation launched a complaint against Canada under NAFTA. Lone Pine’s complaint is being heard in private trade courts, and whatever is decided there, like all ISDS cases, will supersede national and regional law. NAFTA’s foundation will shape the relationship and rules of the new CETA — TTIP with the EU. Trade rules, legally-binding, build on one another!

Dropping rules in Newfoundland, Labrador and beyond to help out corporations! On Friday March 6th, it was reported in the Globe and Mail that Canada was ordered to pay ExxonMobil and Murphy Oil 17.3 million because of policy for regional economic development in struggling East coast communities. Newfoundland and Labrador, still struggling from unrecovered cod fisheries, told the companies to pay into local Research and Development (R&D) in exchange for use of oil. The companies sued and Canada lost in the trade courts.

What does our future under the NAFTA–CETA–TTIP–TPP trade chain look like? Our future relies on humanity creating a much better balance of the environment and business in global economic policy. It’s time to try some new moves. Bring the public back to the dance of country-to-country economic affairs. Free trade treaties set the quality of life for all generations into the future, and will shape the outcome of climate security. I know, innocuous sounding policy. Who knew? A future case, reported in May 2014 in The Globe and Mail, could be launched under NAFTA for the Keystone Pipeline. TransCanada Corporation could ISDS-sue the US for its resistance to Alberta bitumen oil.

Do North Americans, known for contributing a hefty share of CO2, not have a responsibility to secure trade that puts the concerns of communities first? Or shall we continue to spend taxpayers’ money on legal fees and fines from corporate trade-suits against our laws.

 

Advertisements


The Battle to Buy Local

Some leaders in government are rejecting a binding treaty that diminishes buy-local and allows corporations to sue us if we don’t comply. Do the rest feel that it’s okay?

Being able to buy and source locally in goods and services is the heartbeat of a community. People value procurement power — it’s key to community security and happiness. Farmer’s market, post office, city square — local procurement not only secures jobs but it’s the fabric of community relationships. With free trade, local exchange is being shrunk to carve out markets for transnational corporations, and a super-national law system, ISDS, is being erected to enforce this goal.

Last week, the government of Newfoundland and Labrador took a stand. Premier Paul Davis told the federal Conservatives they would not take part in the CETA, the Comprehensive Economic and Trade Agreement, without compensation. The province join an ignored group of approximately forty Canadian municipalities who between 2010 and 2014 sent resolutions to upper government requesting exclusion. The concern for the province and the city councils is CETA’s restrictions to buying and processing locally. Newfoundland is refusing to participate because of these impacts on fisheries. Jobs in fish plants are expected to be lost to align with the ban on local standards. The province says that the federal government originally agreed to compensate for the incalculable loss with $280 million in a fisheries fund.  The province wanted to use part of the money to help transition lost workers. CETA will nullify sub-national policy. Newfoundland and Labrador’s — Minimal Processing Requirements (MPR) — provincial rules to ensure that a percentage of fish from coastal waters is processed by local workers will be trumped by trade laws.

Newfoundland is not alone. In 2013 and 2014, Toronto requested the federal and provincial government exclude them because of restrictions imposed on essentials like local food networks. Toronto is unwilling to relinquish job creation initiatives. Some transit vehicles are sourced in the region on purpose. Though more expensive to set up locally, in the end, the jobs created boost Toronto’s economy and community well-being.

It’s not just the new CETA restrictions, it’s the severity of their enforcement under ISDS. If ignored, the government opens itself to lawsuits from transnational corporations. In this historical moment of developing the long-term rules of relationship between the EU and North America, instead of giving special legal rights to corporations for accessing contracts in our cities, we could rewrite procurement to explicitly protect local decision-making for jobs, environmental protections and social well-being. We could set a precedent for the security of the whole globe by removing ISDS from the CETA; this may be what Germany and France are now pushing for. Forget minimum standards of treatment for a corporation. Appropriate trade would set enforceable standards of treatment for people in Newfoundland and beyond.

Some sub-national governments are looking at the implications on communities in the future under these multi-decade treaties. It’s time the rest put on their spectacles. We need to source and build locally for jobs, for the climate, for our well-being. A legal system that battles for the rights of corporations to make profit has no business interfering with the ancient exchange of local goods and services. Who next is willing to stand up for local buying, building and being?

Further Reading:

http://www.canadians.org/blog/ceta-appears-wobbly-provincial-dispute-isds-lurks-horizon


I’ve been thinking about how corporations are suing countries.

I’ve been thinking a lot lately about transnational corporations suing countries. The fancy name for this is Investor State Dispute Settlement (ISDS) and it happens in free trade. ISDS is on my mind a whole bunch as Germany speaks out about the inclusion of ISDS in the soon to be announced CAN-EU CETA deal.  https://www.flickr.com/photos/campact/sets/72157647398779707/

ISDS was first employed in NAFTA , the North American Free Trade Agreement. Some say this deal, circa 1994, was the first New Generation deal because of its use of Investor State.  ISDS is a trade mechanism with binding international law power. It affords corporations the opportunity to sue nation states if the profits they expected from the opening of specific sectors in a free trade deal are diminished because the country has laws or policies that prevent earnings. It is not confusing really but expresses exactly as its name says — a State for Investors. Ethyl Corporation was the first to successfully sue Canada in the mid nineties, for approximately 16 million, when Canada attempted to bar its gasoline additive. Researchers in Canada believed it was carcinogenic. Ethyl won on the grounds that profits expected as a result of NAFTA were lost. There have been hundreds of cases administered through trade tribunals since and the number of cases launched is on a steep incline every year. Through leaked texts in German news and other places, critics of CETA have said that corporations will be able to sue countries when municipalities use public money for various buy-local initiatives, municipal procurement, and protection of local public management, but no ones knows for certain as the text has not been shared publicly.

Let’s talk trade that works. Opening borders to gastronomic delights! to expertise in regions that most benefit! How about encouraging the growth of sale in specialty items (like fair trade bananas) that could give economic stability to a struggling country? But when you get into lawsuits waged in a one way direction from corporations to countries, it feels like we are no longer talking about trade.  The conversations turns a whole lotta dark. People don’t like it. Investor State creates an Investor’s State superimposed on a Nation State. This is the kind of trade that makes people uncomfortable. It’s the kind of design that will sink itself.

People from Canada, Germany, France, and many other locales in between are bidding Investor State Adieu. Adios. Au Revoir.

We are entering a new era — one of critical trade justice understanding that will not tolerate excessive corporate rights at the expense of family and community well being — whether or not we call them new generation free trade, CETA, or we@#$@#lkflskdjfls investor state ding-a-ling.